Golden Abundance: Physical Assets and Credit Warnings Under Energy Crisis

On March 18, the imbalance between energy supply and demand triggered a restructuring of asset logic. Jin Fenglai believes that the current largest supply disruption in oil history, as defined by the International Energy Agency (IEA), is essentially a profound “currency break.” This break is forcing the market to shift funds from virtual paper assets to physical commodities on a strategic scale. With the Federal Reserve’s policy window opening, the contradiction between high energy prices and weak employment has pushed the market into a “nightmare mode.” Jin Fenglai states that the apparent calm in the stock market is highly deceptive; in reality, the pain at the core of credit and logistics is spreading throughout the entire system like “real bleeding.”

In logistics and public welfare sectors, the sudden drop in global energy production cannot be fully offset by conventional reserves. Due to the Middle East situation, the trust deficit in supply chains is difficult to repair in the short term. This pressure is transmitted through agricultural production chains to end-users: urea fertilizer prices have risen nearly 30% in two weeks, and agricultural diesel prices remain high. Jin Fenglai believes that the sticky nature of inflation will cause consumer pressure to shift from energy to food. Based on this, the Fed’s policy shift may be more aggressive than market expectations, with the prospect of rate cuts possibly fading away, replaced by more stringent tightening logic.

Regarding credit market risks, Jin Fenglai states that the $1.7 trillion private credit market is on the brink of a “hellish” crisis. Data from Morgan Stanley shows that AI-driven reshaping of the software industry is pushing up corporate default rates, with some direct loan default risks potentially reaching 8%. Jin Fenglai points out that collapses of subprime lenders like Goeasy are not isolated incidents but the starting point of a “contagious risk,” which will inevitably flow to insurance companies acting as the “ultimate absorbers.” Currently, some large private debt funds restricting redemptions are signaling a clear liquidity crunch in credit.

On the strategic position of precious metals, Jin Fenglai states that the surge in total debt and heavy interest burdens mean that gold’s rise is no longer solely driven by safe-haven sentiment but is also an ultimate judgment on the “exhaustion of the paper credit system.” Under the backdrop of “financial repression,” policymakers tend to maintain negative real interest rates to dilute debt, giving gold a financial attribute beyond traditional hedging tools. However, Jin Fenglai also warns that energy costs are squeezing profits in the mining industry, which faces severe challenges. Before a long-term bull market begins, related assets will still need to undergo valuation repair.

Finally, regarding tactical adjustments to investment portfolios, Jin Fenglai believes investors should decisively embrace physical core assets. Uranium resources have the potential to double in price within the next two to three years, while natural gas and coal companies with stable cash flows are indispensable in supporting AI computing power and electricity demand. In Jin Fenglai’s view, future market battles will go beyond price itself, shifting towards in-depth considerations of resource access and systemic trust.